The East India Company (EIC)[a] was an English, and later British, joint-stock company founded in

1600 and dissolved in 1874.[4] It was formed to trade in the Indian Ocean region, initially with the East
Indies (the Indian subcontinent and Southeast Asia), and later with East Asia. The company
seized control of large parts of the Indian subcontinent and colonised parts of Southeast
Asia and Hong Kong. At its peak, the company was the largest corporation in the world by various
measures. The EIC had its own armed forces in the form of the company's three presidency armies,
totalling about 260,000 soldiers, twice the size of the British army at the time.[5] The operations of the
company had a profound effect on the global balance of trade, almost single-handedly reversing the
trend of eastward drain of Western bullion, seen since Roman times.[6][7]
Originally chartered as the "Governor and Company of Merchants of London Trading into the East-
Indies",[8][9] the company rose to account for half of the world's trade during the mid-1700s and early
1800s,[10] particularly in basic commodities including cotton, silk, indigo
dye, sugar, salt, spices, saltpetre, tea, and opium. The company also ruled the beginnings of
the British Empire in India.[10][11]
The company eventually came to rule large areas of India, exercising military power and assuming
administrative functions. Company rule in India effectively began in 1757 after the Battle of
Plassey and lasted until 1858. Following the Indian Rebellion of 1857, the Government of India Act
1858 led to the British Crown assuming direct control of India in the form of the new British Raj.
The company subsequently experienced recurring problems with its finances, despite frequent
government intervention. It was dissolved in 1874 under the terms of the East India Stock Dividend
Redemption Act enacted one year earlier, as the Government of India Act had by then rendered it
vestigial, powerless, and obsolete. The official government machinery of the British Raj had
assumed its governmental functions and absorbed its armies.

Origins[edit]
Further information: Anglo-Spanish War (1585–1604)

Colonial India

Imperial entities of India

Austrian India 1778–1785

Swedish India 1731–1813

 Dutch India 1605–1825

Danish India 1620–1869

French India 1668–1954

Portuguese India
(1505–1961)

Casa da Índia 1434–1833

Portuguese East India Company 1628–1633

British India
(1600–1947)

EIC in India 1600–1757

Company rule in India 1757–1858

British rule in Portuguese India 1797–1813

British Raj 1858–1947

British rule in Burma 1824–1948

Princely states 1721–1949

Partition of India 1947–

 v
 t
 e

James Lancaster commanded the first East India Company voyage in 1601
In 1577, Francis Drake set out on an expedition from England to plunder Spanish settlements in
South America in search of gold and silver. Sailing in the Golden Hind he achieved this, and then
sailed across the Pacific Ocean in 1579, known then only to the Spanish and Portuguese. Drake
eventually sailed into the East Indies and came across the Moluccas, also known as the Spice
Islands, and met Sultan Babullah. In exchange for linen, gold and silver, a large haul of exotic spices
including cloves and nutmeg were obtained – the English initially not realising their huge value.
[12]
Drake returned to England in 1580 and became a hero; his circumnavigation raised an enormous
amount of money for England's coffers, and investors received a return of some 5,000 per cent.
Thus started an important element in the eastern design during the late sixteenth century.[13]
Soon after the defeat of the Spanish Armada in 1588, the captured Spanish and Portuguese ships
and cargoes enabled English voyagers to travel the globe in search of riches.[14] London merchants
presented a petition to Queen Elizabeth I for permission to sail to the Indian Ocean.[15] The aim was
to deliver a decisive blow to the Spanish and Portuguese monopoly of far-eastern trade.[16] Elizabeth
granted her permission and in 1591, James Lancaster in the Bonaventure with two other ships,
[17]
financed by the Levant Company, sailed from England around the Cape of Good Hope to
the Arabian Sea, becoming the first English expedition to reach India that way.[17][6]: 5 Having sailed
around Cape Comorin to the Malay Peninsula, they preyed on Spanish and Portuguese ships there
before returning to England in 1594.[15]
The biggest prize that galvanised English trade was the seizure of a large Portuguese carrack,
the Madre de Deus, by Sir Walter Raleigh and the Earl of Cumberland at the Battle of Flores on 13
August 1592.[18] When she was brought in to Dartmouth she was the largest vessel ever seen in
England and she carried chests of jewels, pearls, gold, silver coins, ambergris, cloth, tapestries,
pepper, cloves, cinnamon, nutmeg, benjamin (a highly aromatic balsamic resin used for perfumes
and medicines), red dye, cochineal and ebony.[19] Equally valuable was the ship's rutter (mariner's
handbook) containing vital information on the China, India, and Japan trade routes.[18]
In 1596, three more English ships sailed east but all were lost at sea.[15] A year later however saw the
arrival of Ralph Fitch, an adventurer merchant who, with his companions, had made a remarkable
nine year overland journey to Mesopotamia, the Persian Gulf, the Indian Ocean, India and Southeast
Asia.[20] Fitch was consulted on Indian affairs and gave even more valuable information to Lancaster.
[21]

History [edit]
Formation[edit]
In 1599, a group of prominent merchants and explorers met to discuss a potential East Indies
venture under a royal charter.[6]: 1–2 Besides Fitch and Lancaster,[6]: 5 the group included Stephen
Soame, then Lord Mayor of London; Thomas Smythe, a powerful London politician and administrator
who had established the Levant Company; Richard Hakluyt, writer and apologist for British
colonization of the Americas; and several other sea-farers who had served with Drake and Raleigh.[6]:
1–2

On 22 September, the group stated their intention "to venture in the pretended voyage to the East
Indies (the which it may please the Lord to prosper)" and to themselves invest £30,133 (over
£4,000,000 in today's money).[22][23] Two days later, the "Adventurers" reconvened and resolved to
apply to the Queen for support of the project.[23] Although their first attempt had not been completely
successful, they sought the Queen's unofficial approval to continue. They bought ships for the
venture and increased their investment to £68,373.
They convened again a year later, on 31 December 1600, and this time they succeeded; the Queen,
responded favourably to a petition by "George, Earl of Cumberland and 218 others,[24] including
James Lancaster, Sir John Harte, Sir John Spencer (both of whom had been Lord Mayor of London),
the adventurer Edward Michelborne, the nobleman William Cavendish and other Aldermen and
citizens.[25] She granted her charter to their corporation named Governor and Company of
Merchants of London trading into the East Indies.[15] For a period of fifteen years, the charter
awarded the company a monopoly[26] on English trade with all countries east of the Cape of Good
Hope and west of the Straits of Magellan.[27] Any traders there without a licence from the company
were liable to forfeiture of their ships and cargo (half of which would go to the Crown and half to the
company), as well as imprisonment at the "royal pleasure".[28]
The charter named Thomas Smythe as the first governor[25]: 3 of the company, and
24 directors (including James Lancaster)[25]: 4 or "committees", who made up a Court of Directors.
They, in turn, reported to a Court of Proprietors, who appointed them. Ten committees reported to
the Court of Directors. By tradition, business was initially transacted at the Nags Head Inn,
opposite St Botolph's church in Bishopsgate, before moving to East India House in Leadenhall
Street.[29]

Early voyages to the East Indies[edit]

Sir James Lancaster commanded the first East India Company voyage in 1601 aboard Red Dragon.
[30]
The following year, whilst sailing in the Malacca Straits, Lancaster took the rich 1,200 ton
Portuguese carrack Sao Thome carrying pepper and spices. The booty enabled the voyagers to set
up two "factories" – one at Bantam on Java and another in the Moluccas (Spice Islands) before
leaving.[31] They returned to England in 1603 to learn of Elizabeth's death but Lancaster was knighted
by the new king, James I on account of the voyage's success.[32] By this time, the war with Spain had
ended but the company had profitably breached the Spanish-Portuguese duopoly; new horizons
opened for the English.[16]
In March 1604, Sir Henry Middleton commanded the Company's second voyage. General William
Keeling, a captain during the second voyage, led the third voyage aboard Red Dragon from 1607 to
1610 along with Hector under Captain William Hawkins and Consent under Captain David
Middleton.[33]
Early in 1608, Alexander Sharpeigh was made captain of the company's Ascension, and general or
commander of the fourth voyage. Thereafter two ships, Ascension and Union (captained by Richard
Rowles), sailed from Woolwich on 14 March 1608.[33] This expedition was lost.[34]

East India Company Initial expeditions[34]

Total Bullion Goods Ships &

Year Vessels Notes
Invested £ sent £ sent £ Provisions £

1603 3 60,450 11,160 1,142 48,140

1606 3 58,500 17,600 7,280 28,620

Vessels
1607 2 38,000 15,000 3,400 14,600
lost

1608 1 13,700 6,000 1,700 6,000

 East India Company Initial expeditions[34]

Total Bullion Goods Ships &

Year Vessels Notes
Invested £ sent £ sent £ Provisions £

1609 3 82,000 28,500 21,300 32,000

1610 4 71,581 19,200 10,081 42,500

1611 4 76,355 17,675 10,000 48,700

1612 1 7,200 1,250 650 5,300

1613 8 18,810 12,446

1614 8 13,942 23,000

272,544

1615 6 26,660 26,065

1616 7 52,087 16,506

Initially, the company struggled in the spice trade because of competition from the well-
established Dutch East India Company. The English company opened a factory in Bantam on Java
on its first voyage, and imports of pepper from Java remained an important part of the company's
trade for twenty years. The Bantam factory closed in 1683.
 Red Dragon fought the Portuguese at the Battle of Swally in 1612,
and made several voyages to the East IndiesThe emperor Jahangir investing a courtier with a robe of
honour, watched by Sir Thomas Roe, English ambassador to the court of Jahangir at Agra from 1615 to
1618, and others
English traders frequently fought their Dutch and Portuguese counterparts in the Indian Ocean. The
company achieved a major victory over the Portuguese in the Battle of Swally in 1612,
at Suvali in Surat. The company decided to explore the feasibility of a foothold in mainland India,
with official sanction from both Britain and the Mughal Empire, and requested that the Crown launch
a diplomatic mission.[35]
Foothold in India[edit]
See also: Establishment of English trade in Bengal (1600–1700)

Company ships docked at Surat in Gujarat in 1608.[36] The company's first Indian factory was
established in 1611 at Masulipatnam on the Andhra Coast of the Bay of Bengal, and its second in
1615 at Surat.[37][36] The high profits reported by the company after landing in India initially prompted
James I to grant subsidiary licences to other trading companies in England. However, in 1609, he
renewed the East India Company's charter for an indefinite period, with the proviso that its privileges
would be annulled if trade was unprofitable for three consecutive years.[citation needed]
In 1615, James I instructed Sir Thomas Roe to visit the Mughal Emperor Nur-ud-din
Salim Jahangir (r. 1605–1627) to arrange for a commercial treaty that would give the company
exclusive rights to reside and establish factories in Surat and other areas. In return, the company
offered to provide the Emperor with goods and rarities from the European market. This mission was
highly successful, and Jahangir sent a letter to James through Sir Thomas Roe:[35]
Upon which assurance of your royal love I have given my general command to all the kingdoms and
ports of my dominions to receive all the merchants of the English nation as the subjects of my friend;
that in what place soever they choose to live, they may have free liberty without any restraint; and at
what port soever they shall arrive, that neither Portugal nor any other shall dare to molest their quiet;
and in what city soever they shall have residence, I have commanded all my governors and captains
to give them freedom answerable to their own desires; to sell, buy, and to transport into their country
at their pleasure. For confirmation of our love and friendship, I desire your Majesty to command your
merchants to bring in their ships of all sorts of rarities and rich goods fit for my palace; and that you
be pleased to send me your royal letters by every opportunity, that I may rejoice in your health and
prosperous affairs; that our friendship may be interchanged and eternal.

— Nuruddin Salim Jahangir, Letter to James I.

Expansion[edit]
See also: List of Anglo-Indian Wars
The company, which benefited from the imperial patronage, soon expanded its commercial trading
operations. It eclipsed the Portuguese Estado da Índia, which had established bases
in Goa, Chittagong, and Bombay – Portugal later ceded Bombay to England as part of
the dowry of Catherine of Braganza on her marriage to King Charles II. The East India Company
also launched a joint attack with the Dutch United East India Company (VOC) on Portuguese and
Spanish ships off the coast of China that helped secure EIC ports in China,[38] independently
attacking the Portuguese in the Persian Gulf Residencies primarily for political reasons.[39] The
company established trading posts in Surat (1619) and Madras (1639).[40] By 1647, the company had
23 factories and settlements in India, and 90 employees.[41] The Crown turned Bombay over to the
company in 1668, and the company established a presence in Calcutta in 1690.[40] The major
factories became the walled forts of Fort William in Bengal, Fort St George in Madras, and Bombay
Castle.[citation needed]
In 1634, the Mughal emperor Shah Jahan extended his hospitality to the English traders to the
region of Bengal,[42] and in 1717 customs duties were completely waived for the English in Bengal.
The company's mainstay businesses were by then cotton, silk, indigo dye, saltpetre, and tea. The
Dutch were aggressive competitors and had meanwhile expanded their monopoly of the spice trade
in the Straits of Malacca by ousting the Portuguese in 1640–1641. With reduced Portuguese and
Spanish influence in the region, the EIC and VOC entered a period of intense competition, resulting
in the Anglo-Dutch Wars of the 17th and 18th centuries.
Within the first two decades of the 17th century, the Dutch East India Company or Vereenigde
Oostindische Compagnie, (VOC) was the wealthiest commercial operation in the world with
50,000 employees worldwide and a private fleet of 200 ships. It specialised in the spice trade and
gave its shareholders 40% annual dividend.[43]
The British East India Company was fiercely competitive with the Dutch and French throughout the
17th and 18th centuries over spices from the Spice Islands. Some spices, at the time, could only be
found on these islands, such as nutmeg and cloves; and they could bring profits as high as 400 per
cent from one voyage.[44]
The tension was so high between the Dutch and the British East Indies Trading Companies that it
escalated into at least four Anglo-Dutch Wars:[44] 1652–1654, 1665–1667, 1672–1674 and 1780–
1784.
Competition arose in 1635 when Charles I granted a trading licence to Sir William Courteen, which
permitted the rival Courteen association to trade with the east at any location in which the EIC had
no presence.[45]
In an act aimed at strengthening the power of the EIC, King Charles II granted the EIC (in a series of
five acts around 1670) the rights to autonomous territorial acquisitions, to mint money, to command
fortresses and troops and form alliances, to make war and peace, and to exercise both civil and
criminal jurisdiction over the acquired areas.[46]
In 1689, a Mughal fleet commanded by Sidi Yaqub attacked Bombay. After a year of resistance the
EIC surrendered in 1690, and the company sent envoys to Aurangzeb's camp to plead for a pardon.
The company's envoys had to prostrate themselves before the emperor, pay a large indemnity, and
promise better behaviour in the future. The emperor withdrew his troops, and the company
subsequently re-established itself in Bombay and set up a new base in Calcutta.[47]

Indian exports of textiles to Europe (pieces per year)[48]

EIC VOC Total

Year Franc Ed Denmar
 e I k

s
Madra Bomba Sura EIC VOC
Bengal
s y t (total) (total)

1665
139,67 126,57
– 7,041 37,078 95,558 266,249
7 2
1669

1670
169,05 510,52 257,91
– 46,510 294,959 768,439
2 1 8
1674

1675
193,30 569,54 127,45
– 66,764 309,480 697,006
3 7 9
1679

1680
107,66 408,03 967,78 283,45 1,251,24
– 452,083
9 2 4 6 0
1684

1685
169,59 244,06 614,42 316,16
– 200,766 930,593
5 5 6 7
1689

1690
171,88 156,89
– 59,390 23,011 89,486 328,778
7 1
1694

1695
130,91 107,90 387,52 364,61
– 148,704 752,136
0 9 3 3
1699
1700
197,01 104,93 597,97 310,61
– 296,027 908,589
2 9 8 1
1704

1705
204,01 294,88
– 70,594 99,038 34,382 498,900
4 6
1709

1710
260,31 150,04 575,10 372,60
– 164,742 947,703
8 2 2 1
1714

1715
251,58 534,18 435,92
– 20,049 582,108 970,111
5 8 3
1719

1720
341,92 269,65 796,29 475,75 1,272,04
– 184,715
5 3 3 2 5
1724

1725
558,85 142,50 821,31 399,47 1,220,78
– 119,962
0 0 2 7 9
1729

1730
583,70 727,81 241,07
– 86,606 57,503 968,886
7 6 0
1734

1735
580,45 137,23 784,67 315,54 1,100,21
– 66,981
8 3 2 3 5
1739

1740
619,30 812,70 288,05 1,100,75
– 98,252 295,139
9 0 0 0
1744
 1745
479,59 144,55 684,18 262,26
– 60,042 946,449
3 3 8 1
1749

1750
406,70 169,89 632,17 532,86 1,165,03
– 55,576
6 2 4 5 9
1754

1755
307,77 106,64 470,19 321,25
– 55,770 791,443
6 6 2 1
1759

Slavery 1621–1834[edit]
The East India Company's archives suggest its involvement in the slave trade began in 1684, when
a Captain Robert Knox was ordered to buy and transport 250 slaves from Madagascar to St. Helena.
[49]
The East India Company began using and transporting slaves in Asia and the Atlantic in the early
1620s, according to the Encyclopædia Britannica,[50] or in 1621, according to Richard Allen.
[51]
Eventually, the company ended the trade in 1834 after numerous legal threats from the British
state and the Royal Navy in the form of the West Africa Squadron, which discovered various ships
had contained evidence of the illegal trade.[52]
Japan[edit]

A document with the original vermilion seal of Tokugawa Ieyasu,

granting trade privileges in Japan to the East India Company in 1613
In 1613, during the rule of Tokugawa Hidetada of the Tokugawa shogunate, the British ship Clove,
under the command of Captain John Saris, was the first British ship to call on Japan. Saris was the
chief factor of the EIC's trading post in Java, and with the assistance of William Adams, a British
sailor who had arrived in Japan in 1600, he was able to gain permission from the ruler to establish a
commercial house in Hirado on the Japanese island of Kyushu:
We give free license to the subjects of the King of Great Britaine, Sir Thomas Smythe, Governor and
Company of the East Indian Merchants and Adventurers forever safely come into any of our ports of
our Empire of Japan with their shippes and merchandise, without any hindrance to them or their
goods, and to abide, buy, sell and barter according to their own manner with all nations, to tarry here
as long as they think good, and to depart at their pleasure.[53]
Unable to obtain Japanese raw silk for export to China, and with their trading area reduced to Hirado
and Nagasaki from 1616 onwards, the company closed its factory in 1623.[54]
Anglo-Mughal War[edit]
Main article: Anglo-Mughal War (1686–1690)
 French illustration of Sir Josiah Child requesting a pardon from
the Emperor Aurangzeb
The first of the Anglo-Indian Wars occurred in 1686 when the company conducted naval operations
against Shaista Khan, the governor of Mughal Bengal. This led to the siege of Bombay and the
subsequent intervention of the Mughal Emperor, Aurangzeb. Subsequently, the English company
was defeated and fined.[55][56]
Mughal convoy piracy incident of 1695[edit]
Main article: Ganj-i-Sawai

In September 1695, Captain Henry Every, an English pirate on board the Fancy, reached the Straits
of Bab-el-Mandeb,[citation needed] where he teamed up with five other pirate captains to make an attack on
the Indian fleet returning from the annual pilgrimage to Mecca. The Mughal convoy included the
treasure-laden Ganj-i-Sawai, reported to be the greatest in the Mughal fleet and the largest ship
operational in the Indian Ocean, and its escort, the Fateh Muhammed. They were spotted passing
the straits en route to Surat. The pirates gave chase and caught up with the Fateh Muhammed some
days later, and meeting little resistance, took some £40,000 of silver.[57]: 136–137
Every continued in pursuit and managed to overhaul Ganj-i-Sawai, which resisted strongly before
eventually striking. Ganj-i-Sawai carried enormous wealth and, according to contemporary East India
Company sources, was carrying a relative of the Grand Mughal, though there is no evidence to
suggest that it was his daughter and her retinue. The loot from the Ganj-i-Sawai had a total value
between £325,000 and £600,000, including 500,000 gold and silver pieces, and has become known
as the richest ship ever taken by pirates.[58]
When the news arrived in England it caused an outcry. To appease Aurangzeb, the East India
Company promised to pay all financial reparations, while Parliament declared the pirates hostis
humani generis ("the enemy of humanity").[citation needed] In mid-1696 the government issued a £500
bounty on Every's head and offered a free pardon to any informer who disclosed his whereabouts.
The first worldwide manhunt in recorded history was underway.[57]: 144
The plunder of Aurangzeb's treasure ship had serious consequences for the English East India
Company. The furious Mughal Emperor Aurangzeb ordered Sidi Yaqub and Nawab Daud Khan to
attack and close four of the company's factories in India and imprison their officers, who were almost
lynched by a mob of angry Mughals, blaming them for their countryman's depredations, and
threatened to put an end to all English trading in India. To appease Emperor Aurangzeb and
particularly his Grand Vizier Asad Khan, Parliament exempted Every from all of the Acts of
Grace (pardons) and amnesties it would subsequently issue to other pirates.[59][disputed – discuss]

English, Dutch and Danish factories at Mocha

An 18th-century depiction of Henry Every, with the Fancy shown engaging its prey in the background

British pirates that fought during the Child's War engaging the Ganj-i-Sawai
 

Depiction of Captain Every's encounter with the Mughal Emperor's granddaughter after his September
1695 capture of the Mughal trader Ganj-i-Sawai
The Opium Wars[edit]
The East India Company started selling opium to Chinese merchants in the 1770's in exchange for
goods like porcelain and tea,[60] causing a series of opioid addiction outbreaks across China in 1820.
[61]
The ruling Qing dynasty outlawed the opium trade in 1796 and 1800,[62] but British merchants
continued illegally nonetheless.[63][64] The Qing took measures to prevent the East India Company
from selling opium, and destroyed tens of thousands of chests of opium already in the country.
[65]
This series of events led to the First Opium War in 1839, which involved a succession of British
naval attacks along the Chinese coast over the course of several months. As part of the Treaty of
Nanjing in 1842, the Qing were forced to give British merchants special treatment and the right to
sell opium. The Chinese also ceded territory to the British, including the island of Hong Kong.[66]

Forming a complete monopoly[edit]

Trade monopoly[edit]

Rear view of the East India Company's factory at Cossimbazar

The prosperity that the officers of the company enjoyed allowed them to return to Britain and
establish sprawling estates and businesses, and to obtain political power, such as seats in the
House of Commons.[67] Ship captains sold their appointments to successors for up to £500. As
recruits aimed to return to Britain wealthy by securing Indian money, their loyalties to their homeland
increased.[67]
The company developed a lobby in the English parliament. Pressure from ambitious tradesmen and
former company associates (pejoratively termed Interlopers by the company), who wanted to
establish private trading firms in India, led to the passing of the deregulating act in 1694.[68]

showEast India Company Act 1697

This act allowed any English firm to trade with India, unless specifically prohibited by act of
parliament, thereby annulling the charter that had been in force for almost 100 years. When the East
India Company Act 1697 (9 Will. 3. c. 44) was passed in 1697, a new "parallel" East India Company
(officially titled the English Company Trading to the East Indies) was floated under a state-backed
indemnity of £2 million.[69] The powerful stockholders of the old company quickly subscribed a sum of
£315,000 in the new concern, and dominated the new body. The two companies wrestled with each
other for some time, both in England and in India, for a dominant share of the trade.[68]
It quickly became evident that, in practice, the original company faced scarcely any measurable
competition. The companies merged in 1708, by a tripartite indenture involving both companies and
the state, with the charter and agreement for the new United Company of Merchants of England
Trading to the East Indies being awarded by Sidney Godolphin, 1st Earl of Godolphin.[70] Under this
arrangement, the merged company lent a sum of £3,200,000 to the Treasury, in return for exclusive
privileges for the next three years, after which the situation was to be reviewed. The amalgamated
company became the United Company of Merchants of England Trading to the East Indies.[68]

Company painting depicting an official of the East India

Company, c. 1760

showEast India Company Act 1711

A constant battle between the company lobby and Parliament followed for decades. The company
sought a permanent establishment, while Parliament would not willingly allow it greater autonomy
and so relinquish the opportunity to exploit the company's profits. In 1712, another act renewed the
status of the company, though the debts were repaid. By 1720, 15% of British imports were from
India, almost all passing through the company, which reasserted the influence of the company lobby.
The licence was prolonged until 1766 by yet another act in 1730.[citation needed]
At this time, Britain and France became bitter rivals. Frequent skirmishes between them took place
for control of colonial possessions. In 1742, fearing the monetary consequences of a war, the British
government agreed to extend the deadline for the licensed exclusive trade by the company in India
until 1783, in return for a further loan of £1 million. Between 1756 and 1763, the Seven Years'
War diverted the state's attention towards consolidation and defence of its territorial possessions in
Europe and its colonies in North America.[71]
The war partly took place in the Indian theatre, between the company troops and the French forces.
In 1757, the Law Officers of the Crown delivered the Pratt–Yorke opinion distinguishing overseas
territories acquired by right of conquest from those acquired by private treaty. The opinion asserted
that, while the Crown of Great Britain enjoyed sovereignty over both, only the property of the former
was vested in the Crown.[71]
With the advent of the Industrial Revolution, Britain surged ahead of its European rivals. Demand for
Indian commodities was boosted by the need to sustain troops and the economy during the war, and
by the increased availability of raw materials and efficient methods of production. As home to the
revolution, Britain experienced higher standards of living. Its ever-growing cycle of prosperity,
demand and production had a profound influence on overseas trade. The company became the
single largest player in the British global market. In 1801 Henry Dundas reported to the House of
Commons that
... on the 1st March, 1801, the debts of the East India Company amounted to 5,393,989l. their
effects to 15,404,736l. and that their sales had increased since February 1793, from 4,988,300l. to
7,602,041l.[72]
Saltpetre trade[edit]

Saltpetre used for gunpowder was one of the major trade goods of the
company
Sir John Banks, a businessman from Kent who negotiated an agreement between the king and the
company, began his career in a syndicate arranging contracts for victualling the navy, an interest he
kept up for most of his life. He knew that Samuel Pepys and John Evelyn had amassed a substantial
fortune from the Levant and Indian trades.
He became a director and later, as governor of the East India Company in 1672, he arranged a
contract which included a loan of £20,000 and £30,000 worth of saltpetre—also known as potassium
nitrate, a primary ingredient in gunpowder—for the King "at the price it shall sell by the candle"—that
is by auction—where bidding could continue as long as an inch-long candle remained alight.[73]
Outstanding debts were also agreed and the company permitted to export 250 tons of saltpetre.
Again in 1673, Banks successfully negotiated another contract for 700 tons of saltpetre at £37,000
between the king and the company. So high was the demand from armed forces that the authorities
sometimes turned a blind eye on the untaxed sales. One governor of the company was even
reported as saying in 1864 that he would rather have the saltpetre made than the tax on salt.[74]

Basis for the monopoly[edit]

Colonial monopoly[edit]
Further information: Great Britain in the Seven Years' War
 The East Offering its Riches to Britannia - Roma Spiridone, 1778 - BL

Foster 245 An engraving of East India House, Leadenhall Street

(1766)
The Seven Years' War (1756–1763) resulted in the defeat of the French forces, limited French
imperial ambitions, and stunted the influence of the Industrial Revolution in French territories. Robert
Clive, the Governor-General, led the company to a victory against Joseph François Dupleix, the
commander of the French forces in India, and recaptured Fort St George from the French. The
company took this respite to seize Manila in 1762.[75][better source needed]
By the Treaty of Paris, France regained the five establishments captured by the British during the
war (Pondichéry, Mahe, Karaikal, Yanam and Chandernagar) but was prevented from erecting
fortifications and keeping troops in Bengal (art. XI). Elsewhere in India, the French were to remain a
military threat, particularly during the War of American Independence, and up to the capture of
Pondichéry in 1793 at the outset of the French Revolutionary Wars without any military presence.
Although these small outposts remained French possessions for the next two hundred years, French
ambitions on Indian territories were effectively laid to rest, thus eliminating a major source of
economic competition for the company.[citation needed]
The Great Bengal famine of 1770, which was exacerbated by the actions of the East India Company,
led to massive shortfalls in expected land values for the company. The Company bore heavy losses
and its stock price fell significantly. In May 1772 the EIC stock price rose significantly. In
June Alexander Fordyce lost £300,000 shorting EIC stock, leaving his partners liable for an
estimated £243,000 in debts.[76] As this information became public, 20–30 banks across Europe
collapsed during the British credit crisis of 1772-1773.[77][78] In India alone, the company had bill debts
of £1.2 million. It seems that EIC directors James Cockburn and George Colebrooke were "bulling"
the Amsterdam market during 1772.[79] The root of this crisis in relation to the East India Company
came from the prediction by Isaac de Pinto that ‘peace conditions plus an abundance of money
would push East Indian shares to ‘exorbitant heights.’[80]
In September the company took out a loan from the Bank of England, to be repaid from the sale of
goods later that month. But with buyers scarce, most of the sale had to be postponed, and when the
loan fell due, the company’s coffers were empty. On October 29 the bank refused to renew the loan.
That decision set in motion a chain of events that made the American Revolution inevitable. The
East India Company had eighteen million pounds of tea sitting in British warehouses. A huge amount
of tea as assets which were lying unsold. Selling it in a hurry would do wonders for its finances.[81]
On 14 January 1773 the directors of the EIC asked for a government loan and unlimited access to
the tea market in the American colonies, both of which were granted.[82] In August 1773 the Bank of
England assisted the EIC with a loan.[83]
The East India Company had also been granted competitive advantages over colonial American tea
importers to sell tea from its colonies in Asia in American colonies. This led to the Boston Tea
Party of 1773 in which protesters boarded British ships and threw the tea overboard. When
protesters successfully prevented the unloading of tea in three other colonies and in Boston,
Governor Thomas Hutchinson of the Province of Massachusetts Bay refused to allow the tea to be
returned to Britain. This was one of the incidents which led to the American Revolution and
independence of the American colonies.[84]
The company's trade monopoly with India was abolished in the Charter Act 1813. The monopoly with
China was ended in 1833, ending the trading activities of the company and rendering its activities
purely administrative.

Disestablishment[edit]
In the aftermath of the Indian Rebellion of 1857 and under the provisions of the Government of India
Act 1858, the British Government nationalised the company. The British government took over its
Indian possessions, its administrative powers and machinery, and its armed forces.[citation needed]
The company had already divested itself of its commercial trading assets in India in favour of the UK
government in 1833, with the latter assuming the debts and obligations of the company, which were
to be serviced and paid from tax revenue raised in India. In return, the shareholders voted to accept
an annual dividend of 10.5%, guaranteed for forty years, likewise to be funded from India, with a final
pay-off to redeem outstanding shares. The debt obligations continued beyond dissolution, and were
only extinguished by the UK government during the Second World War.[85]
The company remained in existence in vestigial form, continuing to manage the tea trade on behalf
of the British Government (and the supply of Saint Helena) until the East India Stock Dividend
Redemption Act 1873 came into effect, on 1 January 1874. This Act provided for the formal
dissolution of the company on 1 June 1874, after a final dividend payment and the commutation or
redemption of its stock.[86] The Times commented on 8 April 1873:[4]
"It accomplished a work such as in the whole history of the human race no other trading Company
ever attempted, and such as none, surely, is likely to attempt in the years to come."